The following discussion and analysis provides further detail to the financial condition and results of operations of the Company. The section should be read in conjunction with the notes and financial statements presented elsewhere in this report.

The Company's critical accounting policies involving the significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of June 30, 2012 have remained unchanged from the disclosures presented in the Company's Annual Report on Form 10-K for the year ended September 30, 2011 under the section "Management's Discussion and Analysis of Financial Condition and Results of Operation."

Forward-looking statements in this report relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The information contained in this report should be read in conjunction with the Company's most recent annual report filed with the Securities and Exchange Commission on Form 10-K for the year ended September 30, 2011. Investors are cautioned that forward-looking statements include risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements, including without limitation, the effect of regional and national general economic conditions; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate acquired entities, if any; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board; changes in our organization, compensation and benefit plans; changes in our financial condition or results of operations that reduce capital available to pay dividends; changes in the financial condition or future prospects of issuers of securities that we own. The Company does not assume any duty to update forward-looking statements.

Standard Financial Corp. is a Maryland corporation that provides a wide array of retail and commercial financial products and services to individuals, families and businesses through ten banking offices located in the Pennsylvania counties of Allegheny, Westmoreland and Bedford and Allegany County, Maryland through its wholly-owned subsidiary Standard Bank.

Comparison of Financial Condition at June 30, 2012 and September 30, 2011

General. The Company's total assets increased $8.1 million, or 1.9%, to $442.7 million at June 30, 2012 from $434.6 million at September 30, 2011. The increase was due primarily to increases in net loans and investment securities. Total liabilities increased $6.7 million, or 1.9%, to $362.6 million at June 30, 2012 from $355.9 million at September 30, 2011. The increase was due primarily to increases in certificate of deposit accounts and Federal Home Loan Bank advances.

Cash and Cash Equivalents. Cash and cash equivalents decreased $2.1 million, or 16.9%, to $10.5 million at June 30, 2012 from $12.7 million at September 30, 2011 due in part to fund increases in loans and investment securities.

Loans. At June 30, 2012, net loans were $292.3 million, or 66.0% of total assets, an increase of $7.2 million from $285.1 million or 65.6% of total assets at September 30, 2011. This increase was primarily due to increases of $4.2 million in the commercial real estate and commercial loan portfolios and $1.7 million in the one- to four-family residential real estate portfolio. We have continued our focus on steadily increasing our commercial real estate loans to better diversify our loan portfolio.

Investment Securities. Investment securities available for sale increased $3.2 million to $66.2 million at June 30, 2012 from $62.9 million at September 30, 2011. Purchases of $24.8 million of investment securities during the nine months ended June 30, 2012 consisted primarily of government agency bonds and tax-exempt municipal securities. The purchases were offset by calls and maturities of government agency bonds and municipal securities totaling $14.9 million and sales of government agency bonds of $6.1 million during the nine months ended June 30, 2012.

Mortgage-Backed Securities. The Company's mortgage-backed securities available for sale portfolio increased $555,000 to $43.4 million at June 30, 2012 from $42.8 million at September 30, 2011. Purchases of mortgage-backed securities during the nine months ended June 30, 2012 totaled $9.5 million partly offset by repayments of mortgage-backed securities of $8.8 million.

Deposits. We accept deposits primarily from the areas in which our offices are located. We have consistently focused on building broader customer relationships and targeting small business customers to increase our core deposits. We also rely on our enhanced technology and our customer service to attract and retain deposits. We offer a variety of deposit accounts with a range of interest rates and terms. Our deposit accounts consist of savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts and individual retirement accounts. We do not accept brokered deposits. Interest rates, maturity terms, service fees and withdrawal penalties are established on a periodic basis. Deposit rates and terms are based primarily on current operating strategies and market interest rates, liquidity requirements and our deposit growth goals.

Deposits increased $5.4 million, or 1.7%, to $325.7 million at June 30, 2012 from $320.3 million at September 30, 2011. The increase resulted primarily from a $5.1 million, or 3.8%, increase in certificate of deposit accounts during the nine months ended June 30, 2012. The increase in certificates of deposit resulted from an increase in longer term certificate products some of which provide the customer an option to increase the interest rate on the certificate in the future.

Borrowings. Our borrowings consist of advances from the Federal Home Loan Bank of Pittsburgh and funds borrowed under repurchase agreements. Total borrowings increased $2.4 million, or 7.6%, to $33.8 million at June 30, 2012 from $31.4 million at September 30, 2011. The increase was due primarily to new Federal Home Loan Bank advances totaling $8.0 million partly offset by the repayment of $4.9 million of advances during the nine months ended June 30, 2012.

Stockholders' Equity. Stockholders' equity increased $1.4 million to $80.1 million at June 30, 2012 from $78.7 million at September 30, 2011. The increase was due primarily to net income of $2.4 million partly offset by the repurchase of common stock totaling $1.0 million and cash dividends paid totaling $452,000 for the nine months ended June 30, 2012.

Average Balance and Yields

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments were made, as the effect thereof was not material. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the tables as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense.

                                                     For the Three Months Ended June 30,
                                               2012                                     2011
                                  Average                                Average
                                Outstanding                 Yield/     Outstanding
                                  Balance       Interest     Rate        Balance       Interest    Yield/ Rate
                                                           (Dollars in thousands)
Interest-earning assets:
Loans                          $     298,455   $    3,617      4.85 % $     295,502   $    3,918          5.30 %
Investment and
mortgage-backed securities           111,472          680      2.44 %       101,789          724          2.85 %
Interest earning deposits              8,301            1      0.05 %        12,190            1          0.03 %
Total interest-earning
assets                               418,228        4,298      4.11 %       409,481        4,643          4.54 %
Noninterest-earning assets            27,169                                 28,278
Total assets                   $     445,397                          $     437,759
Interest-bearing
liabilities:
Savings accounts               $     110,305           46      0.17 % $     120,291          106          0.35 %
Certificates of deposit              139,824          837      2.39 %       125,470          782          2.49 %
Money market accounts                  6,260            1      0.06 %         6,076            3          0.20 %
Demand and NOW accounts               71,224           12      0.07 %        62,154           14          0.09 %
Total deposits                       327,613          896      1.09 %       313,991          905          1.15 %
Federal Home Loan Bank
advances                              32,086          194      2.42 %        38,236          283          2.96 %
Securities sold under
agreements to repurchase               2,765            1      0.14 %         5,792            4          0.28 %
Total interest-bearing
liabilities                          362,464        1,091      1.20 %       358,019        1,192          1.33 %
Noninterest-bearing
liabilities                            3,280                                  3,297
Total liabilities                    365,744                                361,316
Stockholders' equity                  79,653                                 76,443
Total liabilities and
stockholders' equity           $     445,397                          $     437,759

Net interest income                            $    3,207                             $    3,451
Net interest rate spread (1)                                   2.91 %                                     3.20 %
Net interest-earning assets
(2)                            $      55,764                          $      51,462
Net interest margin (3)                                        3.07 %                                     3.37 %
Average interest-earning
assets to interest- bearing
liabilities                           115.38 %                               114.37 %

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

                                                       For the Nine Months Ended June 30,
                                                 2012                                      2011
                                   Average                                   Average
                                 Outstanding                               Outstanding
                                   Balance      Interest    Yield/ Rate      Balance      Interest    Yield/ Rate
                                                             (Dollars in thousands)
Interest-earning assets:
Loans                           $     296,041   $  11,121          5.01 % $     294,674   $  11,856          5.36 %
Investment and
mortgage-backed securities            105,660       1,988          2.51 %        97,587       2,074          2.83 %
Interest earning deposits              10,407           4          0.05 %        15,103           7          0.06 %
Total interest-earning assets         412,108      13,113          4.24 %       407,364      13,937          4.56 %
Noninterest-earning assets             28,359                                    28,555
Total assets                    $     440,467                             $     435,919
Interest-bearing liabilities:
Savings accounts                $     111,770         155          0.18 % $     121,415         418          0.46 %
Certificates of deposit               138,691       2,541          2.44 %       124,878       2,391          2.55 %
Money market accounts                   6,262           6          0.13 %         6,247          11          0.23 %
Demand and NOW accounts                68,464          36          0.07 %        60,956          43          0.09 %
Total deposits                        325,187       2,738          1.12 %       313,496       2,863          1.22 %
Federal Home Loan Bank
advances                               30,002         575          2.56 %        37,955         888          3.12 %
Securities sold under
agreements to repurchase                3,363           5          0.20 %         5,197          13          0.33 %
Total interest-bearing
liabilities                           358,552       3,318          1.23 %       356,648       3,764          1.41 %
Noninterest-bearing
liabilities                             2,977                                     3,763
Total liabilities                     361,529                                   360,411
Stockholders' equity                   78,938                                    75,508
Total liabilities and
stockholders' equity            $     440,467                             $     435,919

Net interest income                             $   9,795                                 $  10,173
Net interest rate spread (1)                                       3.01 %                                    3.15 %
Net interest-earning assets
(2)                             $      53,556                             $      50,716
Net interest margin (3)                                            3.17 %                                    3.33 %
Average interest-earning
assets to interest- bearing
liabilities                            114.94 %                                  114.22 %

(2) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average total interest-earning assets.

Comparison of Operating Results for the Three Months Ended June 30, 2012 and 2011

General. Net income for the quarter ended June 30, 2012 was $764,000 compared to $845,000 for the quarter ended June 30, 2011, a decrease of $81,000, or 9.6%. The decrease was due primarily to a decrease in net interest income of $244,000, or 7.1%, and an increase in noninterest expenses of $63,000, or 2.6%, partially offset by a $125,000, or 29.4%, decrease in the provision for loan losses and lower income tax expense of $82,000, or 21.1%.

Net Interest Income. Net interest income for the quarter ended June 30, 2012 was $3.2 million compared to $3.5 million for the quarter ended June 30, 2011. Our net interest rate spread and net interest margin were 2.91% and 3.07%, respectively for the three months ended June 30, 2012 compared to 3.20% and 3.37% for the same period in the prior year. The decrease in the net interest rate spread and net interest rate margin was the result of the yield on interest-earning assets declining more than the cost of interest-bearing liabilities.

Interest and Dividend Income. Total interest and dividend income of $4.3 million for the three months ended June 30, 2012 decreased by $345,000 compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.11% for the three months ended June 30, 2012 from 4.54% for the same period in the prior year. Average interest-earning assets increased by $8.7 million, or 2.1%, to $418.2 million for the three months ended June 30, 2012 from $409.5 million for the same period in 2011.

Interest income on loans decreased $301,000, or 7.7%, to $3.6 million for the three months ended June 30, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 4.85% for the three months ended June 30, 2012 from 5.30% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $3.0 million, or 1.0%, to $298.5 million for the three months ended June 30, 2012 from $295.5 million for the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $44,000, or 6.1%, to $680,000 for the three months ended June 30, 2012 from $724,000 for the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.44% for the three months ended June 30, 2012 from 2.85% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $9.7 million, or 9.5%, to $111.5 million for the three months ended June 30, 2012 from $101.8 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $101,000, or 8.5%, to $1.1 million for the three months ended June 30, 2012 from $1.2 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.20% for the three months ended June 30, 2012 from 1.33% for the prior year period. Partially offsetting this decrease in interest expense was as an increase in the average balance of interest-bearing liabilities of $4.4 million, or 1.2%, to $362.5 million for the three months ended June 30, 2012 from $358.0 million for the same period in the prior year.

Interest expense on deposits decreased by $9,000, or 1.0%, to $896,000 for the three months ended June 30, 2012 from $905,000 for the same period in the prior year. The average cost of deposits declined from 1.15% for the three months ended June 30, 2011 to 1.09% for the three months ended June 30, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of deposits which increased $13.6 million, or 4.3%, to $327.6 million for the three months ended June 30, 2012 from $314.0 million for the same period in 2011.

Interest expense on Federal Home Loan Bank advances decreased $89,000, or 31.4%, to $194,000 for the three months ended June 30, 2012 from $283,000 for the same period in the prior year. The average balance of advances decreased $6.2 million, or 16.1%, to $32.1 million for the three months ended June 30, 2012 compared to the same period in the prior year. In addition, the average cost of advances decreased to 2.42% for the quarter ended June 30, 2012 from 2.96% for the quarter ended June 30, 2011 as higher rate advances matured and were repaid.

Provision for Loan Losses. The provision for loan losses decreased by $125,000 to $300,000 for the three months ended June 30, 2012 from $425,000 for the same period in 2011. Non-performing loans at June 30, 2012 were $4.1 million or 1.39% of total loans, $4.6 million or 1.60% of total loans at September 30, 2011 and $3.2 million or 1.10% of total loans at June 30, 2011. The provision that was recorded was sufficient, in management's judgment, to bring the allowance for loan losses to a level that reflects the losses inherent in our loan portfolio relative to loan mix, economic conditions and historical loss experience.

Noninterest Income. Noninterest income increased $19,000, or 3.2%, to $615,000 for the three months ended June 30, 2012 from $596,000 for the same period in the prior year due mainly to higher net loan sale gains due to a higher volume of loan sales partly offset by lower annuity and mutual fund fees and service charges due to lower activity or demand.

Noninterest Expenses. Noninterest expenses increased by $63,000, or 2.6%, to $2.5 million for the three months ended June 30, 2012 compared to the same period in 2011. The increase was due mainly to general cost increases in personnel related expenses.

Income Tax Expense. The Company recorded a provision for income tax of $307,000 for the three months ended June 30, 2012 compared to $389,000 for the three months ended June 30, 2011 due to lower income before taxes. The effective tax rate declined slightly from 28.7% to 31.5% for the three months ended June 30, 2012 and 2011, respectively, due mainly to a higher level of tax exempt income.

Comparison of Operating Results for the Nine Months Ended June 30, 2012 and 2011

General. Net income for the nine months ended June 30, 2012 was $2.4 million compared to $1.7 million for the nine months ended June 30, 2011. Net income for the nine months ended June 30, 2011 included a $1.4 million one-time contribution to Standard Charitable Foundation ($908,000 after tax impact). This contribution represented $1.2 million or 3.5% of the stock issued on October 6, 2010 and $200,000 in cash. Excluding the one-time charitable contribution, net income decreased $222,000 for the nine months ended June 30, 2012 compared to the same period in the prior year due primarily to a decrease in net interest income of $378,000, or 3.7%, and an increase in noninterest expenses of $317,000, or 4.5%, partially offset by a lower provision for loan losses of $300,000, or 25%.

Net Interest Income. Net interest income for the nine months ended June 30, 2012 was $9.8 million compared to $10.2 million for the nine months ended June 30, 2011. Our net interest rate spread and net interest margin were 3.01% and 3.17%, respectively for the nine months ended June 30, 2012 compared to 3.15% and 3.33% for the same period in the prior year. The decrease in the net interest rate spread and net interest rate margin was the result of the yield on interest-earning assets declining more than the cost of interest-bearing liabilities.

Interest and Dividend Income. Total interest and dividend income of $13.1 million for the nine months ended June 30, 2012 decreased by $824,000, or 5.9%, compared to the same period in the prior year. The decrease was due to a decrease in the average yield on interest-earning assets, partially offset by an increase in the average balance of interest-earning assets. The average yield on interest-earning assets decreased to 4.24% for the nine months ended June 30, 2012 from 4.56% for the same period in the prior year. Average interest-earning assets increased by $4.7 million, or 1.2%, to $412.1 million for the nine months ended June 30, 2012 from $407.4 million for the same period in 2011.

Interest income on loans decreased $735,000, or 6.2%, to $11.1 million for the nine months ended June 30, 2012 due primarily to a decrease in the average yield on loans. The average yield on loans receivable decreased to 5.01% for the nine months ended June 30, 2012 from 5.36% for the same period in the prior year. The decrease in average yield was primarily attributable to our variable rate loans adjusting downward as prime and short-term interest rates remained low as well as the origination of new loans in a generally lower interest rate environment and repayment/refinance of higher rate loans. Average loans receivable increased by $1.4 million, or 0.5%, to $296.0 million for the nine months ended June 30, 2012 compared to the same period in the prior year.

Interest income on investment and mortgage-backed securities decreased by $86,000, or 4.1%, to $2.0 million for the nine months ended June 30, 2012 from the same period in the prior year. This decrease was due primarily to a decrease in the average yield earned on investments and mortgage-backed securities to 2.51% for the nine months ended June 30, 2012 from 2.83% for the same period in the prior year due to new investments added in a lower interest rate environment and variable rate investments that adjusted downward. This decrease was partially offset by an increase in the average balance of investment and mortgage-backed securities, which increased by $8.1 million, or 8.3%, to $105.7 million for the nine months ended June 30, 2012 from $97.6 million for the same period in the prior year.

Interest Expense. Total interest expense decreased by $446,000, or 11.8%, to $3.3 million for the nine months ended June 30, 2012 from $3.8 million for the same period in the prior year. This decrease in interest expense was due to a decrease in the average cost of interest-bearing liabilities to 1.23% for the nine months ended June 30, 2012 from 1.41% for the prior year period. Partially offsetting this decrease was an increase in average interest-bearing liabilities of $1.9 million, or 0.5%, to $358.6 million for the nine months ended June 30, 2012 compared to the same period in the prior year.

Interest expense on deposits decreased by $125,000, or 4.4%, to $2.7 million for the nine months ended June 30, 2012 compared to the same period in the prior year. The average cost of deposits declined from 1.22% for the nine months ended June 30, 2011 to 1.12% for the nine months ended June 30, 2012. The continued low level of market interest rates enabled us to reduce the rates of interest paid on deposit products. Partially offsetting this decrease in interest expense on deposits was an increase in the average balance of deposits which increased $11.7 million, or 3.7%, to $325.2 million for the nine months ended June 30, 2012 from $313.5 million for the same period in 2011.

Interest expense on Federal Home Loan Bank advances decreased $313,000 or 35.2%, to $575,000 for the nine months ended June 30, 2012 from $888,000 for the same period in the prior year. The average balance of advances decreased $8.0 million or 21.0% to $30.0 million for the nine months ended June 30, 2012 compared to the same period in the prior year. In addition, the

. . .